A successful marketing business requires a lot of planning and foresight. The first year is mostly about survival, with 20% of small companies failing by the second year.
Some of the top causes of failure include:
- Lack of cash
- An unfit team
- No market need
- Better competition
It’s easy to make mistakes when starting out, so make sure you learn about common oversights and how to avoid them.
1. Forget About Consistency
Consistency is the key to successful branding. Many new marketing businesses switch between logos, graphics, color schemes and more in their first year. These little changes can hurt recognizability with consumers. Branding differentiates you from the competition. When focused on the day-to-day rush of keeping a new business afloat, it can be easy to forget about these primary values.
Consistency doesn’t mean your business can’t change. Instead, it means building a strong foundation that ensures regular delivery of your brand’s promise or values. Richard Branson, for example, is a businessman who started a record label and transitioned to running an airline. No matter the product or service offered, people expect his brand to center around adventure and risk-taking while remaining customer-focused.
2. Ignore the Competition
The launch of a fledgling operation is time-consuming. Many new businesses ignore the competition to focus on gaining awareness and growing a profit. Ignoring your competitors, however, can stunt long-term growth.
Success relies on continuous adjustments based on what your audience wants. The best way to understand your target audience is to study your competitors and what they offer. How could your business make improvements?
When looking at competitors, you should ask:
- What are their strengths?
- What are their weaknesses?
- What is their pricing scheme?
- Who are their competitors?
Consider how other brands position themselves in the market. Do they target a specific audience, such as people 60 and older? Perhaps they market mainly to women. Do they advertise their use of environmentally friendly practices? All of these factors circle back to brand position.
3. Sell to Everyone
One mistake many first-year businesses make, no matter the industry, is trying to sell to everyone. It’s important to realize some people don’t care about your product or service. When you market to everyone, you waste valuable time and resources. Instead, make the process more efficient by targeting a specific audience.
Try to narrow your audience down to specific factors like:
- Income Level
If you have current customers, start by analyzing them. Examine your product and consider who is most in need. Which people will benefit from your business? Consider the clientele your competitors attract.
4. Spend Too Much Money
Money is a top concern with most first-year businesses. Your initial reaction might be to invest a large sum into one great tactic, something that will boost growth and attract investors. Yet the showy technique rarely pays off. In the end, most blow their funds and brew failure.
Overspending occurs for a number of reasons, including:
- No Plans
- No Analytics
- Unfit Vendors
- Overpriced Vendors
For example, does your marketing firm plan to produce educational materials or other products? Then labeling and carton printing may eat up a large portion of your budget. To save money, plan to buy labels in bulk, which drops the price-per-label. Another option is to skip the label altogether and find a vendor who can print directly onto the box.
5. Underestimate Word-of-Mouth
Some digital-driven marketers forget about the power of word-of-mouth. According to experts, it’s one of the most influential forms of advertising. Yet most businesses are more interested in collecting social media followers than in connecting with them.
Some research indicates that 92% of consumers say they trust recommendations more than all other forms of advertising. Buyers believe a personal suggestion because they assume the person is unbiased and happy with your product or service. New businesses can garner authentic word-of-mouth attention through referral programs and social media.
Word-of-mouth marketing is a brand-building tool that, once established, can inexpensively build more business for you. The research available reveals that consumers referred to your business by others are more likely to make a purchase than those gained through traditional marketing methods.
6. Ignore Social Influencers
Everyone has heard of influencer marketing. Some new marketing firms have shied away from the strategy, believing it’s too expensive or detracts from their goals. However, when you team up with someone in your industry — someone not in direct competition — you can gain new followers and broaden your audience.
For example, say you have a social media channel dedicated to talking about industry news, strategies and insights. You may discuss how video is a hot marketing tactic. While you may not make your own marketing videos, you can partner with a trusted production expert. With this technique, your audience can learn more about the industry without detracting from your brand.
7. Don’t Track Results
Optimization should be a continuous business tactic. Without analytics, you can’t pinpoint a problem and decide what to change. If you don’t track your goals, spending, conversions, calls, foot traffic and more, you’re throwing your money and efforts in the trash.
Within the first year of your business venture, you’re sure to make mistakes. Tracking allows you to identify those mistakes and correct them. Marketing analytics will enable you to invest and prioritize in a smart way.
To start tracking your business results, consider each marketing activity you’ve performed and the outcome. Ask yourself: how have your efforts paid off? Decide how to tweak your strategies for improved results. AI in marketing, an industry expected to grow to $89.85 billion by 2025, can simplify this process.
A first-year business in any industry faces a unique set of challenges. For a marketing firm, those challenges revolve around customer acquisition, budgeting and optimization. To avoid making common mistakes, remember the blunders above and how to prevent them.